Increasing chip costs could lead to more expensive phones and PCs in 2022

TSMC, the world's biggest chipmaker, is reportedly preparing its steepest price hike in 10 years.
TSMC, the world's biggest chipmaker, is reportedly preparing its steepest price hike in 10 years.PHOTO: REUTERS

SINGAPORE (HARDWAREZONE) - Be prepared to pay higher prices for smartphones, tablets or PCs next year.

A report by Nikkei Asia claims that chipmakers are marking up their production costs due to the ongoing global component shortage.

TSMC, the world's biggest chipmaker, is reportedly preparing its steepest price hike in 10 years. Even before this price hike, TSMC's prices are already 20 per cent higher than its rivals in the industry.

The price hike is also a strategy by TSMC to minimise double booking by its clients, where they order more chips than they actually require in hope of securing production line space. The double booking makes it difficult for TSMC to gauge the "real demand" of chips.

Nikkei Asia said the increasing chip costs will have a "noticeable" effect on retail prices of devices such as smartphones and computers as they typically use more components. Consumer electronics brand will be forced to introduce higher-end models in 2022 to offset the price hikes instead of focusing on lower-end and mid-range models.

For those worried that Apple will increase the prices for the upcoming iPhone 13, market research firm TrendForce believes it will not be the case.

TrendForce claims the base prices of this year's iPhone 13, expected to be unveiled on Sept 14, will be "relatively on par" with last year's iPhone 12.

However, Apple has confirmed that supply constraints are likely to hit the iPhone and iPad in the third quarter.

Earlier this year, Apple confirmed that there would be supply constraints for the iPad tablet and Mac computer in the second half of the year.

TSMC and Apple supplier Foxconn expect component shortages to last through 2022. Contract manufacturing company Flex predicts the chip shortages to last into 2023.

Correction note: This report has been edited for clarity.